ATO’s super computer exhausting accountants

The Australian Taxation Office’s new computer system is picking up potentially problematic claims at record rates but accountants say they are working overtime dealing with investigations it has triggered – and often for free.

The $800 million system has dramatically improved the ATO’s ability to match 500 million pieces of data a year against taxpayer claims. But while accountants applauded its capabilities, they rued the volume of easily explicable issues it picked up.

For the 2011 tax year, the ATO has stopped 76,000 returns it suspected might include excessive or fraudulent claims; some 21 per cent were then cleared after they were checked.
Greg Hayes
, director of accountants Hayes Knight, said investigation programs targeting a common area, such as work-related expenses, were particularly problematic as they generated inquiries into a lot of clients an agent would have to deal with.

“You tend to have a flood of correspondence coming in all saying the same thing," he said. “That chews a lot of time" –time not easily passed on in the form of costs, he said. Accountants, like Mr Hayes, would often do the work for free to build client loyalty and because there was nothing wrong to begin with. Area manager of accountants ITP Australia, Scott Bailey, said staff across its 250 offices often worked for free, as they tended not to charge for phone calls and emails made to clear a matter with the ATO.

The difficulty of finding out why the ATO had stopped a return in its tracks was frustrating, he said. A perfectly explicable anomaly could take weeks to clear.

For example, a client with a 457 visa – for skilled workers – who claimed the spouse rebate, available because she did not qualify for the family tax benefit under her visa.

But because the system identified her as a resident with a child, it assumed she should have a family tax benefit and no spouse rebate. Her return was held up last year for the same reason but Mr Bailey is now waiting to clear it again.

“If the ATO called me, we could rectify that in two minutes. But we have to wait. We can’t ring them and say who do we talk to about this. Until somebody actually pulls it out of the system, nothing is done."